Making better use of Leisure time.

Colin J. Campbell

 Much of our leisure time is wasted, we spend far too much time in front of the television or playing video games.  If used more wisely it could result in learning a new skill, starting another career or planning  a business venture.  For many  the time between dinner and midnight  is the best time to spend doing these kinds of activities. 

Here are some ideas that might provide a guideline. Keep in mind that it is not necessary to keep this kind of pace going day in and day out, there has to be variety and there has to be time to recharge, use these ideas wisely.

1.       Learn a new skill  -  Start a course, go on line and take a college course, there are hundreds of sites that will provide courses on thousands of subjects many at no cost.  You may already have a skill that you are not using perhaps you should consider beginning to implement that skill on a part time basis in the evening.

2.       Read more -  It doesn’t matter  what you read just read more.  You may want to read books that will enhance your personal skills, or just read a novel.  Start asking others what they are reading, it is often a good source of new ideas.  Interestingly researchers indicate that reading more can reduce the effects of Alzheimer disease.   An hour spent reading every day will have exponential  benefits over the long term it expands the mind and enhances creativity. 

3.       Volunteer  – Use some of your time to  make a contribution to your community, what you give will come back tenfold and at the same time you will be developing skills that can come in handy later in your personal life.  Volunteering provides the opportunity to take a leadership role in situations that will not impact your career or your business directly but could develop skills that will assist with business development. 

4.       Develop your network -  There is probably nothing you can do that will benefit you and your career more than using the tools available to add to your network. That list of individuals that you have commonality with.  It may not be a list that you will use to market a skill or product but rather a network that gives you access to others who can assist you with your objectives.  There is nothing more valuable to you than the contacts you make and keep.

5.       Meditate – Nothing you can do right this minute will have a better effect than learning how to meditate, even if it is for a few minutes.  The major benefit is that it clears your mind, which in turn allows for new fresh ideas to develop.  It will relax you, free your mind of drudgery and refresh your thinking.  

6.       The change in you begins today – Will you take the challenge and begin to use your free time to expand your mind and your skills and begin to prepare for the future?  It will not come easy it just takes discipline and commitment, you won’t regret it.

If technology continues to follow the course it is on it is very possible that the end of work as we know it is not that far off. Technology is going to force radical changes in all facets of our lives.  We may see the end of income tax in the next 20 years as government grapples with the problem of keeping  revenues up while fewer and fewer of us are earning taxable income.  The expansion of our consumption tax may be the answer.

 We could also see guaranteed incomes, where everyone will receive a fixed amount every year.  Which may sound socialistic however if machines are doing the work and creating revenue and tax dollars for government what better way to provide for a countries population? Those with greater ambition will leverage their guaranteed  income into businesses and enterprises that will take advantage of technology to generate more income while others will be content to just live on what they have.

Using time more wisely to prepare ourselves for what seems to be inevitable change just makes sense.  The tools to learn new skills or develop new ideas are readily available at relatively little cost, it just requires discipline to devote the time.

BUILDING AN EMERGENCY PLAN

Recent events in Alberta have pointed out how essential it is to have an emergency plan to deal with  unforeseen circumstances.  The meltdown in oil prices has put 44,000 Albertans out of work in the last year, and the fires at Fort McMurray has devastated thousands of families, many whom may never recover.  The social safety net of EI helps a few, but for many the EI is running out and they are having to resort to using retirement savings and credit card debt to survive. 

Having a plan that protects against the unpredictable is essential, it is just good risk management.  Here are six simple steps that can help build a strong safety net, that allows for independence in tough times and good.

1.       Reduce credit card debt, car loans and unsecured lines of credit - These kinds of high interest debts are costly and strain the family budget.  Get some help, find an advisor who can assist with reorganizing and reducing  the interest payments.  There are ways to do this that can be crafted to meet just about everyone’s needs.  Taking control of debt and reducing the interest payments relieves stress on the family and the budget.  It would be easy to suggest to just get rid of the credit card but that can be difficult, however with proper planning and wise  use of credit it is possible to pay off the credit card every month and not have the high interest payments.

2.       Use the savings made in step one to begin building a safety net -  One excellent way to do this is to set up a Tax Free Savings Account and begin making monthly automatic deposits.  The investment can be a investment fund or other investment vehicle that has higher potential earnings than a savings account and the added advantage of being a bit harder to get at than a savings account.  Resistance to temptation to spend is essential.

3.       Review all employee benefits, especially disability benefits -  A sudden illness or injury can cause havoc if there is not adequate insurance to replace at least seventy five percent of monthly income.  Often group plans cover long term disability and leave the short term disability to Employment Insurance which is about $450.00 per week maximum for 17 weeks.  If $1,800 a month is not adequate to meet your needs consider purchasing additional individual coverage. You may not see the value today but if you are ever disabled it will pay you back tenfold.  It doesn’t have to be expensive often an accident only plan with a critical illness rider is enough. Know what you are covered for before you need it.

4.       Consider purchasing Critical Illness insurance - This coverage will pay a lump sum 30 days after a diagnosis of a critical illness such as heart attack, stroke, cancer or open heart surgery.  A number of other illnesses covered, but the big four are the key’s .  The lump sum payment in the event of a claim, helps with the costs not covered by other plans such as travel or making the mortgage payment. 

5.       Life insurance - No one wants to talk about dying too soon however it is a risk and needs to be addressed if there are loved ones who will be left behind.  Buying life insurance is not quite the hassle it used to be several companies now have electronic applications with guaranteed issue up to $500,000 and the premiums are affordable less than 20.00 a month for $500,000 of coverage for a male non smoker age 25.  Protecting the family has never been easier.

6.       Think long term -  Reducing debt takes time, building a nest egg also takes time. Having an emergency plan only makes sense, you may never use it but if you do you will be very glad you did the preparation in the first place.

 It is your right to live your life by design not default.  You can take charge and with the help of a qualified financial counsellor you can achieve your objectives.  Life does not have to be a rat race nor do  you have to live in a rut.  Make the decision today to take the first step call a reputable financial councillor and get started today. The rest will be easy.

At Guidance Planning Strategies we believe offering sound financial planning ideas is our obligation, the first consultation is free, we will provide a written summary with recommendations at no charge or obligation.  Call us today to set up an appointment, you owe it to the rest of your life to make sound decisions today.

Colin J. Campbell CFP, CLU, is managing partner of Guidance Planning Strategies Ltd. in Cranbrook BC.  Guidance Planning Strategies Ltd.  is an wealth management firm serving the Kootenay’s since 1995.  Specializing in helping families and entrepreneurs live life by design not default.

colin.campbell@gpsbc.ca

www.guidanceplanningstrategies.ca

Why the Canadian Dollar is not worth what it used to be

For years the Canadian Dollar was set at a fixed value against the US dollar, up until the mid 50's it was at $1.110 per US $1.   The Diefenbaker government in their wisdom revalued it to  $.92.5  per US $1 and in 1970 the Liberal government of Lester Pearson decided to let it float against the US $ and ever since we have lived in with a dollar that has been as low as $0.69 and as high as $1.10  with no real reason for the vast fluctuations.  Oh it is described y the odd economist as a phenomenon that is caused by the fact our economy is directly related to the price of oil.

To some extent that maybe correct, however the fact remains that we are a nation of 33 million people  spanning the second largest country in land mass in the world, living right next door to the largest world economy with 350 million residents.  We are the United States largest trading partner and our very economic existence is directly tied to their economy.  So why would we not fix our dollar to theirs?  Doesn't it just make sense?

Another argument that is often posed is that having a dollar worth less than a dollar is good for exports, however it is also harmful to our ability to be competitive producers. It is far easier for companies to claim profitability because of a weak dollar than to pay attention and spending capital on research and development and improving productivity.  The reality is that if you have to compete on a level playing field you will either get better our you will cease to exist. Competition is good for everyone it leads to innovation and better efficiencies. Hiding behind a cheat dollar does not make our producers more efficient if anything it makes them weaker and susceptible to being driving from the market.

We also hear the suggestion that Americans will travel to Canada more readily if their dollar is worth more.  Right where do Canadians want to vacation? In Canada or in Mexico, Hawaii, Florida, California and Arizona, Americans are no different than us, they would much rather go somewhere warm as opposed to coming here.  Let's get serious and stop telling ourselves fairy tales, Canada is never going to be a tourist mecca, it is an interesting place to visit but does not rate high on many bucket lists.

You may recall that in 1987 Canada and the US signed a Free Trade Agreement, and in 1994 Mexico was added. The result of the NFTA was a significant increase in Canadian exports to the US, and then along came a weak dollar.  Since that slump exports have never reached the level they were, The NAFTA did not prevent a softwood lumber tariff being imposed by the US and 75% of our exports go to the US, ($300,000,000). Whether we like it or not our lives are governed by our relationship with our nearest neighbour to the south.  For that very reason alone it is high time we acknowledged our dependency and fixed our dollar to the US dollar,  it should be a par however $0.90 would be fine.

Would this be good for both economies? Yes there is no question both countries would benefit. Canadian companies would be slightly compensated for distance to market and the smaller employment base which impacts manufacturing industries and both economies would benefit from a stabler currency exchange.

Why is this not happening?  Probably because we Canadians just go along with whatever the government of the day puts forth, we are too complacent, we don't question why decisions are made nor do we stand up and shout out loud that this isn't working.

For over 100 years we have lived in peaceful coexistence with our neighbours, we give them hockey players, wheat, lumber and autos, they give us all the rest and a place to spend the winter where it's warmer.  However the fact remains we really are like a pimple on an elephant rear constantly concerned about being squashed when the elephant sits down.  Fixing the rate of the Canadian dollar at par  would go a long way to achieving parity in our relationship. It should never have been allowed to float in the first place. Some misconception that we would be able to take our place on the world stage if we behaved like the rest was probably the reason it was let go in 1970.

Maybe if we all got a little peeved at government and sent the PM an email stating our displeasure something might get done.